Question
Plese help me to answer these questions I will rate you a five-star 5.Which of the following correctly completes this sentence? The goal of capital
Plese help me to answer these questions
I will rate you a five-star
5.Which of the following correctly completes this sentence? The goal of capital budgeting is to... Select one:
a. allocate the available capital to as many projects as possible.
b. allocate the available capital to all projects that will increase the value of the firm.
c. allocate the available capital to the projects that will increase the value of the firm the most.
d. Either (b) or (c), depending on the nature of the projects and the amount of capital available
11. A chain of take-away pizza stores is considering introducing a new line of gluten-free pizzas. Net revenue from the new line of pizzas is expected to total $300,000 per year, but 10% of this net revenue is forecast to consist of people switching from the regular pizzas to the gluten-free pizzas. How would you describe this situation in terms of the NPV analysis upon which the situation will be based. Select one:
a. There is a negative externality equal to $270,000 which should be included in the NPV analysis for the gluten-free pizza project.
b. There is a positive externality equal to $30,000 which should be included in the NPV analysis for the gluten-free pizza project.
c. There is a positive externality equal to $270,000 which should be included in the NPV analysis for the gluten-free pizza project.
d. There is a negative externality equal to $30,000 which should be included in the NPV analysis for the gluten-free pizza project.
16. A put option (with shares as the underlying asset) was originally purchased for $0.52 and is now trading for $2.79. The exercise price is $41 and the underlying share is currently trading for $42.89. What is the time value of the option? Select one:
a. $0.90
b. $-1.37
c. $2.79
d. $1.89
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